The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas was yesterday warned to guard against extensive sovereign-controlled investments that could allow other countries to “own us”.

K. Peter Turnquest, the Opposition’s finance spokesman, said widespread investments in the Bahamas by foreign government-controlled entities would ultimately merit “national security considerations” to prevent them from having to much influence on this country’s internal affairs.

He was speaking after it was revealed that China State Construction and Engineering Company (CSCEC), a Chinese state-owned entity, is considering whether to make a formal bid to acquire downtown Nassau’s British Colonial Hilton resort.

If a deal is sealed, it would give Chinese government-owned entities significant influence in the Bahamian economy, given their extensive investments and involvement in other projects.

China State Construction, apart from being the main contractor for the $2.6 billion Baha Mar project, also has a $150 million equity stake in the project. And the Beijing-controlled China Export-Import Bank is Baha Mar’s main debt financier, having provided at least $1.9 billion to the development.

This effectively makes China owner, financier and contractor for the Bahamas’ second mega resort/casino development, which is being counted on to play the lead role in turning around this nation’s moribund economy and high unemployment rate.

Along with China State Construction’s interest in the British Colonial Hilton, the state-owned China Harbour Engineering Company (CHEC) is the contractor for the $39 million Abaco port.

And privately-owned, Hong Kong-based Hutchison Whampoa, is the major investor in Freeport through the Freeport Container Port, Grand Bahama Development Company (DEVCO) and Freeport Harbour Company.

While welcoming foreign direct investment (FDI), Mr Turnquest told Tribune Business that the Bahamas had to be careful about allowing sovereign-controlled ones amassing too much power.

Asked about the implications of China’s growing investments and interest in the Bahamas, the FNM MP for east Grand Bahama said: “I think as a sovereign country we have to be careful about a concentration of investments by any particular nation, and particularly when you’re talking about national investment vehicles.

“We have to be very careful that we don’t find others owning us by having the majority of investments in this country. There has to be national security considerations to that.”

While backing the Bahamas’ desire to attract FDI, Mr Turnquest added: “We need to be smart about this, and make sure no one entity becomes so significant that they affect every aspect of our economy.

“There are private entities interested in what we have to offer, and we have to look wider than easy targets.”

China’s strategy is to find overseas investments to absorb its surplus dollar and foreign currency reserves, plus excess labour. This is also part of a geopolitical and economic strategy designed to complete for worldwide influence against rivals such as the US.

It has been able to drive a hard bargain, ensuring that at Baha Mar, the majority of work, labour and materials are all sourced from China.

As its sovereign-controlled entities expand their interests in the Bahamas, Beijing’s ‘muscle’ will grow when it comes to negotiating further investment deals in the Bahamas.